Material Men's Mercantile Ass'n v. New York Material Men's Mercantile Ass'n

169 A.D. 843, 155 N.Y.S. 706, 1915 N.Y. App. Div. LEXIS 5055
CourtAppellate Division of the Supreme Court of the State of New York
DecidedNovember 12, 1915
StatusPublished
Cited by18 cases

This text of 169 A.D. 843 (Material Men's Mercantile Ass'n v. New York Material Men's Mercantile Ass'n) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Material Men's Mercantile Ass'n v. New York Material Men's Mercantile Ass'n, 169 A.D. 843, 155 N.Y.S. 706, 1915 N.Y. App. Div. LEXIS 5055 (N.Y. Ct. App. 1915).

Opinion

Laughlin, J.:

This is a suit in equity to enjoin the defendants from conducting their business under their corporate name. The grounds upon which the plaintiff seeks to maintain the action are that the words “Material Men’s,” in the corporate name of plaintiff, have by long user in its business acquired a secondary meaning and are generally understood in the trade as referring to the plaintiff and its business; that the business of plaintiff and defendant being the same, the corporate name of the defendant is so similar to that of the plaintiff that it is calculated to mislead the public, and that the adoption thereof was in violation of our statute (General Corporation Law [Consol. Laws, chap. 23; Laws of 1909, chap. 28], § 6, as amd. by Laws of 1913, chap. 24), which provides as follows: “No certificate of incorporation of a proposed corporation having the same name as a corporation authorized to do business under the laws of this State, or a name so nearly resembling it as to be calculated to deceive, shall be filed or recorded in any office for the purpose of effecting its incorporation,. or. of authorizing it to do business in this State.”

[845]*845The plaintiff was incorporated under the laws of Hew York on the 3d day of February, 1888, and it was found by the trial court that the words “ Material Men’s ” were first used in a corporate title by it. Ever since its incorporation the plaintiff has been actively engaged in business in the city of Hew York in making mercantile credit reports on building contractors and others engaged in building operations, and it originated and has annually compiled, copyrighted and issued to its customers and to others a book known as c ‘ The Association’s Book, ” containing ratings on those engaged in building operations, and has adopted for use in its business and uses blank forms or requisitions printed on paper of distinctive different colors.

The trial court also found, on evidence sustaining it, that at the time of the trial the plaintiff’s annual book had reached the twenty-sixth edition, and has been and is now furnished to a great number of subscribers, and that there is great demand therefor; that owing to the care, skill and experience exercised by the plaintiff, its business has become very extensive; that the plaintiff has expended large sums of money in advertising its business and securing subscribers; that it has in conducting its business from twelve to fifteen employees, ' and has acquired a valuable good will and reputation for honesty and faff dealing.

The defendant was incorporated under the laws of Hew York on October 20, 1913, for conducting a business similar to that conducted by plaintiff and in the same locality. At that time, and for a long time prior thereto, the plaintiff’s office had been at 41 Park Row, borough of Manhattan, Hew York. The defendant established and maintains an office at 66 Broadway in the same borough. When the action was commenced the defendant was actively engaged in competing with the plaintiff in business, the only substantial difference being that for service in some respects more extended than that for which the plaintiff was charging from fifty dollars to ninety dollars per annum, the defendant solicited business at the rate of fifteen dollars per annum. The deféndant also issues annually a book under the samé title'as that of the plaintiff, and containing similar information and .blank forms, also quité ’ similar to those issued by the plaintiff. ' The' trial court found, on evidence [846]*846sustaining it, that the defendant is engaged in a business similar to that of the plaintiff, and is competing with the plaintiff.

Prior to the commencement of the action, which was seven months after the incorporation of the defendant, the defendant solicited business from one of the plaintiff’s subscribers, and continued to solicit business from plaintiff’s customers. There is no evidence that the plaintiff has lost any business or customers to the defendant owing to the similarity of the corporate names, but the evidence shows that some of plaintiff’s customers have been misled by the similarity of the names into believing that business solicited by the defendant was solicited by the plaintiff, and into believing that an extension of the business of the defendant beyond that conducted by the plaintiff by which the defendant offered to furnish legal services to its customers, was made by the plaintiff. In behalf of the plaintiff, evidence was given tending to show that the words “Material Men’s,” in connection with mercantile credit reports, had acquired a secondary meaning, as designating the plaintiff; but this evidence was not conclusive, and the court refused to find the fact as claimed by the plaintiff. The plaintiff conducted its business in its corporate name, but it was also referred to and known in the trade by the shorter name, “ Material Men’s.” It may be that the evidence on this point was insufficient to establish a secondary meaning which entitles the plaintiff to the exclusive right to use those words in the mercantile credit report business, but in the view we take of the case we do not deem it necessary to review the evidence to determine whether or not it sustains the finding. The long period during which the plaintiff was established and conducted its business, and became more or less known to the trade as the “Material Men’s,” entitles it to protection against the incorporation of and competition from a rival under a name so similar as to be likely to mislead the public. In "one sense, the corporate name adopted by the defendant may be said to be practically identical with that. of the plaintiff, the only difference being in .prefixing the name New York, and in a substitution of the word Incorporated for the word Limited, following the .'name;.. Inasmuch as the [847]*847plaintiff contemplated conducting business in New York, and had so conducted it for upwards of twenty-five years, it became and was, in effect, the New York Material Men’s Mercantile Association, which is the name adopted by the defendant. Although the name “NewYork” was not in the corporate name of the plaintiff, it is manifest that since it conducted its business in New York city, it became known as the New York Material Men’s Mercantile Association. It was not necessary for the defendant so nearly to copy the plaintiff’s corporate name, annual book and forms. The business it intended to conduct could have been described equally well by another name which would have distinguished the two corporations and would have prevented confusion. The use of so similar a name in the circumstances fairly warrants the inference that it was selected by those who incorporated the defendant for the purpose of obtaining some benefit or advantage from the good will' of the plaintiff’s long-established and successful business. (Burgess v. Burgess, 3 De G., M. & Gr. [1853] 896. Sée, also, Anargyros v. Egyptian Cigarette Co., 54 App. Div. 345; T. A. Vulcan v. Myers, 139 N. Y. 364; Little v. Kellam, 100 Fed. Rep. 353; New England Awl Co. v. Marlborough Awl Co., 168 Mass. 154; Columbia Engineering Works v. Mallory, 147 Pac. Rep. [Ore. Sup. Ct.] 542.)

Neither company was engaged in manufacturing or had a plant or place of business other than an office. The business of each evidently was principally conducted by soliciting agents. The different locations of the offices would not insure against confusion. The business and method of conducting it, therefore, render confusion between the two corporations probable if not inevitable.

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Bluebook (online)
169 A.D. 843, 155 N.Y.S. 706, 1915 N.Y. App. Div. LEXIS 5055, Counsel Stack Legal Research, https://law.counselstack.com/opinion/material-mens-mercantile-assn-v-new-york-material-mens-mercantile-assn-nyappdiv-1915.